Assessment of the impact of microfinance on thegrowth of small businesses in kisumu municipality,kenya

Abstract

Small scale business persons have always had challenges in investing in business due to ,lack of capital, financial management skills, or the suitable ideas on viable business. However, micro-finance providers have over the last decade proved quite crucial in the provision of small formal loans to small business owners. The study therefore analyzed the impact of micro finance on growth of small businesses in Kisumu Municipality which it had as the only objective. The study employed descriptive statistics involving measures of central tendency and dispersion and used person's correlation to analyze a survey of 315 randomly selected respondents from a targeted population of 4115 registered small scale businesses in Kisumu Municipality. Results were presented using tables and charts. The study findings were consistent and affirmed that availability and accessibility to micro-finance have a positive impact on the growth of small businesses. Moreover, the findings affirmed the existence of correlation between financial, training programmes, advisory services and business idea generation services and growth of small scale businesses that had been suggested in the literature review. The study recommended that MFls be given support by the government through putting in place policies that will support their establishments and suggested that further research be done to assess the influence of micro finance level of commitment on satisfaction of small scale business persons.